UK Provident Financial shuts down struggling home loan service
Adds details of the business statement and background
May 10 (Reuters) – Provident Financial PFG.L Monday called on him to quit his home loan division, putting 2,100 jobs at risk, as the pandemic hit the last nail in a business that had survived the Wall Street crash of 1929 and the global financial crisis..
The UK-based company had been trying to revive the unit for years after botching a division overhaul in 2017 when it looked to replace its army of independent door-to-door collection agents with direct employees.
“In light of the evolution of the sector and the regulatory dynamics in the mortgage industry, as well as the evolution of customer preferences, it is with the greatest regret that we have decided to withdraw from the market. mortgage, ”said CEO Malcolm Le May. .
The company, a subprime lender since its inception in 1880, has said it plans to put the business into managed liquidation or consider a divestiture. He expects the costs associated with an outing to reach up to £ 100million ($ 140.55million).
Provident, which has begun a consultation process with 2,100 employees as part of its plans, also recorded a pre-tax loss of £ 113.5million for 2020 compared to a profit of £ 119million a year ago, the pandemic having affected lending volumes.
The decision to shut down the consumer credit business comes after a warning from Provident in March that the unit could collapse even as it outlined a £ 50million plan to address an increase in complaints and claims. claims against her during the health crisis.
The unit is currently the subject of a regulatory investigation by the UK financial regulator over conduct issues.
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(Reporting by Muvija M in Bengaluru, editing by Sherry Jacob-Phillips)
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